What Is Margin?
The margin, which is one of the basic terms of the Forex market, is among the first terms that investors encounter when they start trading on the market. It is very important for investors to know how to calculate margins, to manage investment strategies and to continue their operations on the market.
Margin represents the minimum amount of money required to open a position on any instrument. This amount varies depending on the price of the instrument, the leverage ratio and the transaction volume.
Use Margin To Determine Your Position
The amount of collateral required to move a position is referred to as margin. The amount of collateral required to open any position is blocked by the system when the position is opened. As long as the position is moved, the unavailable collateral is released as soon as the position is closed. During the period when the position is open, no action can be taken with the blocked collateral. The remaining amount from the contract, other than the collateral blocked depending on the
It is possible to trade both in the downward and upward direction in the Forex market. With the downgrade expectation, sales can open up the buying position with an uptrend, and in either case, revenue can be earned, but if the price does not move in the anticipation direction, the carrying position may pass.
Stop Out / Closing Positions
If the transported position reaches 20% of the collateral (20% on the platform value) by melting in the reverse price movement, the positions are closed by calculated margins, beginning with the most damaged position by the brokerage system. After the first position closes, the collateral level may rise to over 20% with some relief. But if the price reversal continues, the other positions may close in turn.